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The Commercial Lease Guaranty Form is a vital instrument in Canadian commercial real estate transactions, typically employed when a landlord requires additional security beyond the tenant's covenant. This document is particularly common when dealing with new businesses, companies with limited operating history, or situations where the tenant's financial strength alone is insufficient to secure the lease. The guaranty form creates a legally binding commitment from a third party (often a parent company, business owner, or related entity) to fulfill the tenant's obligations if they default. Under Canadian law, these guarantees must be in writing and clearly specify the guaranteed obligations. The document needs to comply with both federal and provincial legislation, including provincial property laws and the federal Bankruptcy and Insolvency Act. The form typically includes detailed provisions about the scope of the guarantee, enforcement mechanisms, and the guarantor's obligations, providing crucial protection for commercial landlords while clearly defining the guarantor's responsibilities.

1. Parties: Identifies the Guarantor(s), Landlord (beneficiary of the guarantee), and Tenant (primary debtor whose obligations are being guaranteed)

2. Background: Recitals explaining the context of the guarantee, including reference to the main lease agreement and the reason for requiring a guarantee

3. Definitions: Key terms used throughout the guarantee agreement, including 'Guaranteed Obligations', 'Lease', 'Premises', and other relevant terms

4. Guarantee and Indemnity: Core section detailing the guarantee obligations, including the scope of the guarantee and indemnification provisions

5. Nature of Guarantee: Specifies whether the guarantee is continuing, unconditional, irrevocable, and/or joint and several

6. Duration of Guarantee: Defines the term of the guarantee, including when it begins and ends

7. Guarantor's Obligations: Detailed list of specific obligations and responsibilities of the guarantor

8. Preservation of Rights: Landlord's rights in relation to the guarantee, including ability to pursue guarantor without first pursuing tenant

9. Representations and Warranties: Guarantor's confirmations regarding their capacity and authority to provide the guarantee

10. Costs and Expenses: Responsibility for costs related to preparation, enforcement, and administration of the guarantee

11. Notices: Process and requirements for giving formal notices under the guarantee

12. Governing Law and Jurisdiction: Specifies applicable law and courts having jurisdiction over disputes